Malta extends the VAT exemption for scheduled passenger transport

What changed in detail

Legal Notice 88 of 2025, the Value Added Tax Act (Amendment of Fifth Schedule) Regulations, 2025, was published in Government Gazette of Malta No. 21,436 on 13 May 2025. It has no separate commencement date, so it applied from publication. Despite some descriptions, it amends the Fifth Schedule, not the Sixth.

Regulation 2(a) substitutes item 11 of Part One of the Fifth Schedule (exempt with credit). Item 11 now covers the supply of:

• (a) transport by scheduled bus service consisting of trips on scheduled routes;
• (b) scheduled inter-island sea transport of passengers by authorised carriers, and other scheduled passenger sea transport the Commissioner recognises;
• (c) special regular services carrying school pupils and students to and from a recognised educational establishment; and
• (d) special regular services carrying workers to and from their work.

Regulation 2(b) adds definitions as item 7 of Part Five. A “scheduled bus service” means both public passenger transport by an operator contracted under regulation 68B and regular passenger transport by an operator authorised under regulation 69 of the Passenger Transport Services Regulations (S.L. 499.56). “Scheduled inter-island sea transport of passengers” means scheduled transport between Malta and Gozo.

What it means

The stated purpose (reg. 1(2)) is to bring scheduled services run by regulation 69 operators into the exemption, alongside the contracted public bus network. Because Part One is exempt with credit, these operators charge no VAT on fares and can still recover input VAT. That is worth more to them than an exemption without credit.

As of November 2026 the substituted item 11 is in force. We found no later notice replacing it. Operators outside the four categories, such as unscheduled coach hire, are not covered.